Successful and sustainable business partnerships: How to select the right partners

Abstract

In more and more industries it becomes true that value creating networks compete against each other with relatively stable relations between suppliers inside the network. Managers all over the world are searching for the most efficient and effective coordinative forms for their relations with OEM's or suppliers within such a value-creating networks. This paper gives a normative guideline to decide if or if not a partnership is the right coordinative form for OEM-supplier relations within a value-creating network. Based on the existing mainly positivistic research in this field, two aspects are highlighted as the main drivers for the suitability of a partnership as a well working governance mechanism for value-creating networks: (i) individualization vs. standardization of the delivered components combined with the potential of the end customers to identify quality differences or not and (ii) the possibilities to allocate the revenues made by the value-creating network on the several ‘partners’ within the network. All aspects were integrated in a decision model for managers to find out if partnership as the coordinative form is really the best choice in a given situation.